2016 (12) TMI 1360 - HC - Companies Law

Winding up petition - outstanding dues - Held that - The payments made through cheques detailed in the reply have not been shown to be even remotely related to the specific invoices for which the due outstanding amount has been claimed by the petitioner company in its statutory notice under Section 434(1)(b) of the Act of 1956 and in this winding up petition. There was admittedly a business relationship between the petitioner and the respondent companies for over three years to a tune of ₹ 7.5 crores turnover and about ₹ 6.5 crore was indeed paid by the respondent company. The winding up petition has been filed only for ₹ 1,00,54,187.24. The defence based on commission due (non specified) for supply of computers/ equipments to Modi Institute of Technology and Science and price of a computer supplied to one Siddarth Raval are ludicrous if not pathetic. The reply to the statutory notice under Section 434(1)(a) of the Act of 1956 on behalf of the respondent company effectively admits large parts of amounts due. In the facts of the case,it is of the view that the defence to the winding up petition is not based on a bonafide dispute substantial or otherwise. It appears to be meritless. The respondent company M/s. Sequel Infocom Private Limited has prima facie neglected to pay its debt despite a statutory notice under Section 434(1)(a) of the Act of 1956 without a bonafide dispute at all being made out and thus in the eyes of law is prima facie deemed to be insolvent. The petition is in the circumstances admitted. The Directors of the respondent company M/s. Sequel Infocom Private Limited are directed to file a statement of affairs of the company as of 31-3-2016 and furnish their current addresses. The citation of admission of winding up petition being admitted be published in two daily newspapers, one in vernacular and the other English i.e. Dainik Navjyoti, Jaipur Edition and Times of India, New Delhi Edition respectively. The citation be also published in the Official Gazette. All costs towards publication to the account of the petitioner company.

Summary

Issues Involved:
1. Outstanding Debt and Statutory Notice
2. Dispute Over Debt Amount
3. Defence Against Winding Up Petition
4. Admission of Liability by Respondent
5. Legal Precedents and Criteria for Winding Up

Issue-wise Detailed Analysis:

1. Outstanding Debt and Statutory Notice:
The petitioner company, M/s. Dell India Private Limited, filed a petition under Sections 434, 434, and 439 of the Companies Act, 1956, seeking the winding up of the respondent company, M/s. Sequel Infocom Private Limited, due to an unpaid debt of ?1,00,54,187.24 for supplies made between 13-12-2007 and 4-6-2010. The petitioner issued a demand notice on 21-4-2010 and a statutory notice on 4-5-2010, which were acknowledged by the respondent.

2. Dispute Over Debt Amount:
The respondent company contested the debt, arguing that the amount claimed was excessive and included duplicated invoices. They also claimed that certain payments made by cheque were not accounted for. Additionally, the respondent alleged that the petitioner failed to provide agreed-upon customer services, causing financial losses and reputational damage.

3. Defence Against Winding Up Petition:
The respondent's defence included claims of duplicated invoices, unaccounted payments, and failure by the petitioner to provide customer services and replace faulty goods. They also mentioned a verbal agreement for a 10% commission on services, which the petitioner allegedly failed to honor. The respondent further claimed a commission for a computer supplied to a third party and non-replacement of faulty monitors.

4. Admission of Liability by Respondent:
In their reply dated 27-5-2010 to the statutory notice, the respondent admitted owing "some money" but disputed the exact amount. They requested additional time to pay due to financial difficulties. The court noted that this admission undermined the respondent's later defences, which were deemed afterthoughts and not substantiated by evidence.

5. Legal Precedents and Criteria for Winding Up:
The court referred to the Supreme Court's judgments in Vijay Industries Vs. NATL Technologies Limited and Madhusudan Gordhandas & Co. Vs. Madhu Woollen Industries (P) Limited. The criteria for winding up include whether the debt is prima facie made out, whether the respondent has neglected to pay, whether there is a bona fide dispute, and whether the defence is substantial. The court found that the respondent neglected to pay the debt without a bona fide dispute, deeming them prima facie insolvent.

Conclusion:
The court admitted the winding up petition and directed the respondent's directors to file a statement of affairs and publish the citation of the winding up petition in specified newspapers and the Official Gazette. The petitioner's costs towards publication were also ordered to be accounted for.